Sharjah Islamic Bank said on Wednesday it planned to raise $480 million by selling shares to existing investors at less than half their market price.

Its stock surged a two-year high before the announcement.

The lender, which complies with Islam's ban on the receipt of interest, will also give investors one share for every five they hold, from last year's profit, it said in a statement on the Abu Dhabi bourse Web site.

The bank will sell 880 million shares in the rights issue at 2 dirhams ($0.545) each.

The rights issue still needs approval from the United Arab Emirates central bank and the economy ministry, Sharjah Islamic said.

Net profit rose 50.4 percent to 301.84 million dirhams, or 0.27 dirhams per share, in 2007, it said. - Reuters